Legal & General Group, a leading insurer on the FTSE 100 index, has exceeded market expectations with its operating profit and solvency ratio for the first half of 2023. The company posted an operating profit of £941 million, surpassing the consensus estimate of £834 million. Although this figure is slightly lower than the previous year’s restated amount under the IFRS 17 accounting standard of £958 million, it still demonstrates the company’s resiliency.
The operating profit from its divisions amounted to £1.14 billion, exceeding the consensus estimate of £1.03 billion and only marginally lower than the previous year’s figure of £1.15 billion.
However, Legal & General’s pretax profit fell to £324 million from £697 million, primarily due to investment losses caused by higher interest rates. Additionally, costs incurred from the closure of its Modular Homes division and a write-down from its Onto investment further impacted the overall profitability.
Despite these challenges, the company’s solvency coverage ratio remains strong at 230%, surpassing market expectations of 225%. This ratio serves as a crucial indicator of balance-sheet strength and highlights Legal & General’s robust financial position.
In line with market expectations, Legal & General’s board has announced an interim dividend of 5.71 pence per share.
Outgoing Chief Executive Nigel Wilson expressed confidence in the company’s future prospects, stating, “We remain on track to achieve our five-year ambitions and deliver attractive returns for our shareholders.”
